Following in the controversial footsteps of Yahoo, Best Buy has announced it will end its work-from-home program for 4,000 corporate employees in an effort to spark more "innovation and creativity." NBC's Kevin Tibbles reports.
Struggling electronics retailer Best Buy, long known for a corporate culture that rewards employees for performance rather than office attendance, is following in Yahoo’s footsteps.
A week after Yahoo CEO Marissa Mayer banned working from home, Best Buy announced that it is ending its flexible workplace policies and will require its 4,000 or so headquarters staff to work a traditional 40-hour week at the office.
Best Buy spokesman Jeff Shelman said the decision is “totally about making sure we do everything we can to reinvigorate the company for all our stakeholders.”
The new policy applies to the electronics retailer’s headquarters in Richfield, Minn., and not to most of the company’s 160,000 employees – dubbed “blue shirt” sales associates -- who work in stores.
Shelman emphasized that the new policy doesn’t mean an end to all flexibility.
“If you have a sick kid or say, like today, there’s nine inches of snow on the ground, or you have to go to the dentist, you can have a conversation with your manager,” he said.
The move comes a week after Best Buy announced it would lay off 400 employees at its headquarters, which the company said would help save about $150 million. The electronics retailer also had some good news: On Friday, it posted promising fourth-quarter results, as revenue from U.S. stores open longer than 14 months rose 0.9 percent.
But the last year has been hard on Best Buy, during which it announced the closure of dozens of stores. In July, the company announced it would lose 2,400 jobs; a company statement this week said there would be more layoffs this year. CEO Hubert Joly took the helm in August after former CEO Brian Dunn abruptly resigned in April 2012.
Best Buy had long-touted its unorthodox workplace, which began in 2005 with a program called Results Only Work Environment, or ROWE. Employees were evaluated on performance alone and were not beholden to a schedule or to the office.
Jody Thompson, a former Best Buy employee who implemented the program there, said that when she left the company in 2007, about 80 percent of the corporate office – between 2,500 and 3,000 employees – had been trained in ROWE. She said nearly all took advantage of the flexible schedule that came with a ROWE-focused work environment. Thompson left Best Buy to co-found Culture Rx with another Best Buy employee.
“It was going really well,” she said. “But over time, more and more happened in terms of new management coming in. There wasn’t the right thinking in place to continue to evolve, so they just decided go to back to 1952.”
Best Buy’s CEO doesn’t blame ROWE for its woes, Shelman said.
“There is no cause and effect that the struggles we’ve had as a company is directly tied to the flexible work schedule,” he said. “It’s just that this time and place the decision has been made that we want as many people as possible physically in position.”
After an investor presentation in November, Joly told the Star Tribune that he wanted employees to feel “disposable as opposed to indispensable.”
Key Banc analyst Brad Thomas has watched Best Buy for 12 years and said he’s not surprised by the company’s decision, noting that the new management team comes from outside the company. “This kind of policy would be the type of thing they’re trying to change about the company from top to bottom,” he said.
But he said even the smartest management team may not be able to save Best Buy in the long run. The practice of “showrooming,” in which customers visit a Best Buy store to check out an item like a TV and then buy it online for less, has cut into the company’s sales.
Despite the announcements by Yahoo and Best Buy, working from home appears to be growing rather than shrinking. The U.S. Census Bureau reports that 13.4 million people worked from home at least part-time during a typical week in 2010.
And research indicates that telecommuting doesn't hinder productivity. Washington State University psychology professor Tahira Probst said via email that research suggests that telecommuting also helps boss-worker relations.
"Telecommuting is associated with significantly higher levels of job satisfaction, lower turnover intentions, reduced role stress, and higher supervisor-ratings of job performance," Probst said.